When Rob Beyer bought a publicly-traded company in Sioux Falls four years ago, there was no human resources component that came with the acquisition.

"From day one I needed HR help,” he said.

Beyer was referred to Alternative HRD, a Sioux Falls-based company that offers HR services to small companies. His firm, EarthBend, used Alternative HRD to handle nearly all the routine HR support for its employees, and Beyer was breathing easy.

“They were able to fill that vital and critical role for me as a contractor and as a partner while I worked to build my business,” he said.

Beyer is not alone in his enthusiasm for the idea of contracting out human resource administration. In recent years, increasing numbers of small-business owners have found outsourcing HR buys them both time and peace of mind.

"The whole idea is to allow clients the freedom to focus on their core competencies, rather than on things that detract from that core," said Dan Oakland, founder and CEO of Alternative HRD, now celebrating 25 years in business. With eight employees, he handles benefits administration and other HR tasks for a number of companies in eastern South Dakota.

“Eighty percent of our work is with small employers that aren’t of the size to justify having a full-time HR person on staff,” he said.

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Oakland bills his company as “the HR department for small employers” and functions as a one-stop shop for HR support. They will develop a client's employee handbook, process payroll, secure and oversee medical benefits and retirement plans and handle worker's compensation claims.

In addition to easing an entrepreneur's administrative headaches, a big advantage to outsourcing HR is that it significantly reduces an employer's liability, Oakland said.

“We’re more familiar with some of the compliance issues and employment laws so we can mitigate risk,” he said. “We can help clients with complaints of discrimination or bad behavior of any sort. We are more proactive on dealing with those issues and address them before they get out of hand.”

Bryan Read saw the wisdom of outsourcing HR when he took the position as administrator for the City of Brandon, an organization with 36 full-time employees that swells to 125 employees in the summer.

“It's one huge headache we don’t need,” he said. “We hired Alternative HRD to streamline and take that burden off our full-time employees in hiring all those seasonal, temporary employees.”

Oakland’s company does the recruiting and interviewing for the City of Brandon and even coordinated their safety project.

HR outsourcing companies like Alternative HRD can also increase profitability for their clients, said Oakland.

“We can very frequently reduce an organization’s turnover to a degree that can be a cost savings along with employee engagement and so on,” he said. “These things aren’t often tracked on a profit and loss statement, but they can certainly make a significant difference in a company's bottom line.”

Oakland said his company has quadrupled its sales in the last first years. They look to continue growing while focusing on “making sure we understand business profitability, sales and everything that goes into that because we want to make sure we’re contributing to that company’s financial success.

“It’s great to have wonderful employee relations and all that, but if it’s not translating into the bottom line, then it’s not going to help that company in the long run,” he said.

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Alternative HRD founder Dan Oakland works in their office located inside the Zeal Center for Entrepreneurship recently.(Photo: Jay Pickthorn/Argus Leader)